Piper Sandler initiates Rollins stock coverage with Overweight rating
Investing.com
Published Jul 01, 2025 05:02AM ET
Investing.com - Piper Sandler initiated coverage on Rollins (NYSE:ROL) with an Overweight rating and a $70.00 price target on Tuesday. According to InvestingPro data, the stock currently trades at $56.42, with analysts' targets ranging from $43.11 to $65.00.
The research firm views Rollins, a leading provider of pest control services, as a company with a long track record of healthy and sustainable growth that is now transitioning from a family-run business to a more modernized public company. The company's track record includes maintaining dividend payments for 55 consecutive years, with impressive gross profit margins of 52.7%.
Piper Sandler compared this transition to Walmart (NYSE:WMT)'s modernization efforts, noting it is being led by the first non-Rollins family member CEO and should accelerate growth while making shares more appealing to investors.
Despite Rollins carrying what Piper Sandler described as a high valuation at approximately 50 times earnings, the firm pointed out this valuation has been consistent over time. InvestingPro analysis confirms this premium valuation, with the stock currently trading above its calculated Fair Value. Get access to detailed valuation metrics and 15+ additional ProTips with an InvestingPro subscription.
Piper Sandler expects Rollins' earnings per share growth to potentially accelerate in coming years from the current low-to-mid-teens rate, viewing it as a "high quality compounding EPS growth story" suitable for both Consumer and Business Services investors. The company has demonstrated solid performance with a revenue growth of 9.46% in the last twelve months and analysts forecast EPS of $1.10 for fiscal year 2025.
In other recent news, Rollins Inc . reported its first-quarter 2025 earnings, achieving an earnings per share (EPS) of $0.22 and revenue of $823 million, which slightly surpassed the anticipated $818.69 million. The company saw a 9.9% year-over-year increase in revenue, with a gross margin of 51.4%, marking a historic high for the first quarter. Jefferies analyst Stephanie Moore upgraded Rollins' stock rating from Hold to Buy, raising the price target to $65, citing high-quality earnings growth and potential for strategic acquisitions. The analyst firm expects Rollins to maintain its organic growth rate, with revised estimates predicting 7.8% organic growth in 2025 and 7.5% in 2026.
Additionally, Rollins Inc. appointed Paul D. Donahue to its Board of Directors and re-elected other directors during its 2025 Annual Meeting of Shareholders. Shareholders also ratified Deloitte & Touche LLP as the independent registered public accounting firm for the fiscal year ending December 31, 2025. These developments, along with the company's focus on strategic acquisitions and investments, indicate a continued emphasis on long-term growth. Rollins' strategic acquisitions, such as Sala Pest Control, are expected to contribute significantly to the company's growth, with Sala anticipated to add $45-50 million in revenue in 2025.
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Written By: Investing.com
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